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3 BY·~ IN THE SUPERIOR COURT OF GU~M 4
5 888 GUAM LLC d.b.a. CLEAN SHOT Civil Case No. CV0680-19 GUAM, 6 Plaintiff,
7 vs. DECISION AND ORDER Re: Plaintiffe' Second Motion for Attorney's 8 Fees and Costs; and Defendant's Motion to JASON PAUL CASTRO CAMPOS and Strike Plaintiff's Reply in Support ofPlaintiff's GINA ANN P. CAMPOS, Second Motion for Attorney's Fees and Costs, 9 or in the Alternative, for Leave to File Sur-
Defendants. Revlv 10
11 This matter came before the Honorable Arthur R. Barcinas on August 15, 2023 and 12 November 7, 2023 for a hearing on Plaintiffs Second Motion for Attorney's Fees and Costs 13 ("Second Motion"), and Defendant's subsequent Motion to Strike Plaintiffs Reply in Support 14 of Plaintiffs Second Motion for Attorney's Fes and Costs, or in the Alternative, for Leave to 15 File Sur-Reply Motion to Set Aside Default Judgment ("Motion to Strike"). Plaintiff 888 16 Guam LLC d.b.a. Clean Shot Guam ("Plaintiff') was represented by Attorney Minakshi V. 17 Hemlani. Defendants Jason Paul Castro Campos and Gina Ann P. Campos (collectively, 18 "Defendants") were represented by Attorney Mark Williams. After considering the pleadings, 19 oral arguments, and applicable law, this Court GRANTS Plaintiff's Second Motion, and 20 DENIES Defendants' Motion to Strike and alternative Motion for Leave to File Sur-Reply. 21 BACKGROUND 22 This case arises out of a contract dispute concerning an option to purchase real property 23 described as 311 Monessa Lane, Pago Bay, Chalan Pago ("Property") under the Lease
24 Agreement with Option to Purchase Property ("Lease/Purchase Agreement") entered into by Page 1 of13 1 Plaintiff and Defendants on or about July 25 and 26, 2014. See Comp!. ,r 5 (May 31, 2019). 2 Plaintiff filed the Verified Complaint for Specific Performance and Alternatively for Breach of 3 Contract on May 31, 2019. Defendants were served with the Summons and Complaint on July 4 14, 2019. 5 Defendants filed a Notice of Bankruptcy Filing to this Court on July 8, 2019, indicating 6 they had filed a voluntary petition for bankruptcy in the U.S. Bankruptcy Court, District Court 7 of Guam ("District Court of Guam"). As a result, proceedings before this Court in the above- s captioned matter were stayed pursuant to 11 U.S.C. §362. Plaintiffs filed a Notice of 9 Bankruptcy Case Dismissal on July 6, 2020, indicating that Defendants' bankruptcy case had 10 been dismissed. Plaintiff served a copy of the Notice via certified mail to the Defendants' last 11 known address on July 7, 2020. Decision and Order (Dec. 30, 2020) at 2. 12 A Notice of Status Hearing was issued on September 23, 2020. Neither Defendants nor 13 their counsel appeared at the Status Hearing held on September 29, 2020. Plaintiff filed a 14 Motion for Entry of Default and Judgment on September 30, 2020, which was served on 15 Defendants' counsel via electronic mail on October 2, 2020. The Clerk of Court entered an 16 Entry of Default on October 7, 2020. On October 22, 2020, Defendants filed their Answer and 17 Counterclaim. Defendants also filed their opposition to the Motion for Default on October 30, 18 2020, and Plaintiffs filed a reply on November 11, 2020. After taking the matter under 19 advisement, the Court issued a Decision and Order granting Plaintiffs Motion for Entry of 20 Default Judgment on December 30, 2020. The decision upheld the Entry of Default entered by 21 the Clerk of Court for the request of specific perfonnance and ordered Defendants to perform 22 their obligations under the Lease/Purchase Agreement and convey marketable title to the 23 Property. The Court also ordered the Defendants' Answer and Counterclaim stricken from the 24 record.
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I On March 11, 2021, Defendants submitted their Motion to Set Aside Default Judgment. 2 Plaintiff filed its opposition on April 5, 2021. Defendants submitted a reply on April 22, 2021 3 and Plaintiff filed a surreply on May 24, 2021. On May 26, 2021, On August 11, 2021, the 4 Court issued a Decision and Order, affirming its December 30, 2020 Decision and Order and 5 denying Defendants' Motion to Set Aside Default Judgment. 6 On January 3, 2022, Plaintiff filed its first Motion for Attorney's Fees and Costs, 7 reserving its right to seek attorney's fees on the grounds that said fees were reasonable and 8 authorized by contract. On January 31, 2022, Defendants filed their opposition, requesting that 9 the Court apply a substantial across-the-board reduction in attorney's fees and deny the award 10 of fees for any work performed by Plaintiffs counsel in connection with the bankruptcy court 11 case. On February 14, 2022, Plaintiff filed its reply. On May 17, 2022, the Court issued a 12 Decision and Order granting Plaintiffs Motion for Attorney's Fees and Costs incurred through 13 February 28, 2022. 14 On June 9, 2022, Defendants filed a Request to Enter Final Judgment. On July 6, 2022, 15 Plaintiff filed its opposition. On July 20, 2022, Defendants filed their reply. 16 On February 20, 2023, the Court entered its Judgment, and found that Defendants had 17 complied with the Court's order for specific perfonnance. The Court further found that, 18 because Plaintiffs breach of contract claim which would have provided a basis for damages 19 had been plead in the alternative, no further issues were pending. 20 On March 7, 2023, Plaintiff filed the instant Second Motion, seeking an additional 21 $5,173.64 in attorney's fees and court costs incurred from March 1, 2022 through Judgment on 22 February 20, 2023. On March 20, 2023, Defendants filed their opposition, arguing that Plaintiff 23 had not submitted any evidence in support of its claim for fees and costs. On April 18, 2023, 24 Plaintiff filed its reply, arguing that Guam Rule of Civil Procedure ("GRCP") 54(d)(2) does not Page 3 of13 1 require supporting invoices to be submitted with a motion for attorney's fees and costs. That 2 argument notwithstanding, Plaintiff attached copies of all invoices listed in the Second Motion. 3 On March 21, 2023, Defendants filed a Notice of Appeal of the February 20, 2023 4 Judgment. On March 22, 2023, Defendants filed a Notice of Appeal for the May 17, 2022 5 Decision and Order granting attorney's fees. 6 On May 2, 2023, Defendants filed the instant Motion to Strike, requesting that the 7 Court either strike Plaintiffs reply or grant Defendants leave to file a sur-reply. Defendants 8 argued that it was improper for Plaintiff to file new evidence in its reply that could have been 9 submitted in its Second Motion, and that Defendants were not given an opportunity to respond 10 to said evidence. 11 On June 19, 2023, Plaintiff filed its opposition to the Motion to Strike, arguing that the 12 Motion to Strike did not meet the GRCP 12(f) standard, and that the proposed sur-reply raised 13 arguments previously rejected and created the possibility of conflicting rulings. On July 5, 14 2023, Defendants filed their reply. 15 On August 15, 2023, the Court held the first hearing on the Motion to Strike. The Court 16 heard arguments from both parties, but, because the status of the above appeals was still 17 pending before the Guam Supreme Court, the Court abstained from taking the matter under 18 advisement and scheduled a status hearing for November 7, 2023, at 10 a.m.,, when the Court 19 was already scheduled to hear the Second Motion. 20 On November 7, 2023, the Court was advised that the appeals had been dismissed, and 21 the parties agreed to submit on the pleadings for both motions. The Court subsequently took 22 the Second Motion and the Motion to Strike under advisement. 23 24 Page 4 of 13
I DISCUSSION 2 I. Second Motion for Attorney's Fees and Costs 3 In the Second Motion, Plaintiff requested that the Court award attorney's fees and costs 4 incurred from March I, 2022 through Judgment in February 2023. Second Mot., at I. Plaintiff 5 argued that reasonable attorney's fees and court costs are recoverable in this case because they 6 were authorized by ,r 2l(e) of the Lease/Purchase Agreement between the parties. Id. Plaintiff 7 requested the total amount of $5,173.64 in fees and costs, listing invoice numbers, dates, and 8 monthly amounts for the months of March, April, June, July, and October of 2022, and January 9 and February of 2023. Id. At 1-2. IO In their Opposition, Defendants argue that the Court deny the Second Motion on the 11 grounds that Plaintiff "has not submitted any evidence in support of its claim that it is entitled 12 to an additional $5,173.64 for attorney's fees and costs," because Plaintiff did not submit 13 copies of Plaintiffs counsel's itemized invoices. Opp. to Second Motion, at 2. 14 a. Legal Standard 15 Under Guam law, "[ e]xcept when express provision therefor is made either in a statute 16 of Guam or in the [GRCP], costs other than attorneys' fees shall be allowed as of course to the 17 prevailing party unless the court otherwise directs." GRCP 54(d)(l). Claims for attorneys' fees 18 and related nontaxable expenses generally shall be made by motion, which must be filed no 19 later than fourteen (14) days after entry of judgment, and must specify the judgment and the 20 statute, rule, or other grounds entitling the moving party to the award, as well as the amount or 2I a fair estimate of the amount sought. GRCP 54(d)(2). If directed by the Court, said motion 22 must also disclose the terms of any agreement with respect to fees to be paid for the services 23 for which claim is made. Id. The Guam Supreme Court has recognized that attorney's fees are 24 Page 5 of13 1 generally not recoverable unless authorized by statute, contract, or under equitable 2 circumstances. Duenas v. George and Matilda Kallingal, P.C., 2012 Guam 4 ,r 48. 3 Because Guam's civil procedure rules are generally derived from their federal 4 counterparts, the Guam Supreme Court has held that federal courts' interpretation of the 5 Federal Rules of Civil Procedure ("FRCP") is persuasive in regard to the GRCP. See Hannah 6 v. Guerrero, 2020 Guam 15, n.7; Gov't of Guam v. O'Keefe, 2018 Guam 4 ,r 9; M Elec. Corp., 7 2016 Guam 35 ,r 40. According to the federal courts of appeal, a motion for attorneys' fees 8 need not be supported at the time of filing with the evidentiary material bearing on the fees. 9 Perfect 10, inc. V. Giganews, Inc., 847 F.3d 657 (9th Cir. 2017) (citing Fed. R. Civ. P. 54, 10 1993 Advisory Comm. Notes); see also Small Justice LLC v. Xcentric Ventures LLC, 873 F.3d 11 313, n.18 (1st Cir. 2017) (finding that trial court was wrong to deny a motion for attorney's 12 fees for lack of supporting documentation). "The material must of course be submitted in due 13 course, according to such schedule as the court may direct in light of the circumstances of the 14 case. What is required is the filing of a motion sufficient to alert the adversary and the court 15 that there is a claim for fees, and the amount of such fees (or a fair estimate)." Small Justice, 16 873 F.3d 313, n. 18 (quoting Advisory Comm. Note to 1993 Amendment of FRCP 17 54(d)(2)(B)).
18 b. Plaintiff has met all of the requirements for entitlement to attorney's fees under GRCP 54(d)(2).
19 In their opposition to the Second Motion, Defendants' sole issue is whether Plaintiff 20 has met the burden of proof for entitlement to attorney's fees and costs. Defendants state that 21 "Plaintiff has not submitted any evidence in support of its claim that it is entitled to an 22 additional $5,173.64 for attorney's fees and costs" and that "Plaintiff has not met its burden of 23 proof," e.g. "'the burden of establishing entitlement to an award."' Opp. to Second Motion, at 2 24
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1 (quoting Love v. Sanctuary Records Group, Ltd., 386 F.App'x 686 (9th Cir. 2010)) (emphasis 2 added). 3 In light of the relevant statutes and case law, the Court finds that Plaintiff has 4 sufficiently proven that it is entitled to attorney's fees under GRCP 54(d)(2). Plaintiff has 5 specified the Judgment for which attorney's fees are sought, Plaintiff has stated the contractual 6 provision which entitles Plaintiff to an award of attorney's fees, and Plaintiff has stated the 7 amount sought. No further supporting documentation was necessary at the time of filing, and 8 the additional documentation was later attached to Plaintiff's reply. 9 Therefore, the Court finds that Plaintiff has met the burden of proof in its Motion for 10 Attorney's Fees. Further, upon consideration of the supporting documentation, the Court finds 11 that the fees sought are reasonable and thus GRANTS Plaintiff's Motion for Attorney's Fees. 12 II. Motion to Strike, or in the Alternative, for Leave to File a Sur-Reply 13 Defendants seek to strike Plaintiff's reply and the supporting documentation therein, or, 14 in the alternative, to be granted leave to file a sur-reply, on the grounds that it was improper for 15 Plaintiff to submit allegedly new evidence in its reply. Plaintiff argues that the reply cannot be 16 stricken under GRCP 12(f) because it is not a pleading, and that GRCP 7(a) does not allow any 17 pleadings other than a complaint, answer, reply, or answer or reply to a third-party answer. 18 Plaintiff further argues that, in the alternative, Defendants do not present good cause to file a 19 sur-reply or demonstrate that the reply brief contains any new arguments. 20 a. Legal standard 21 I. Motion to Strike 22 GRCP 12(f) states that, "[u]pon motion made by a party before responding to a 23 pleading or, if no responsive pleading is permitted by these rules, upon motion made by a party 24 within 20 days after the service of the pleading upon the party or upon the court's own Page 7 ofl3 1 initiative at any time, the court may order stricken from any pleading any insufficient defense 2 or any redundant, immaterial, impertinent, or scandalous matter." As above, the Court finds 3 federal interpretations of the FRCP persuasive in its interpretation of the GRCP. Federal courts 4 of appeal hold that FRCP l 2(f) specifically relates to matters to be stricken from pleadings, and 5 does not pertain to other documents filed with a court. Wimberly v. Clark Controller Co., 364 6 F.2d 225, 227 (6th Cir. 1966). Pleadings are distinguished from motions and other papers in 7 that pleadings consist of only the following: "a complaint and an answer; a reply to a 8 counterclaim denominated as such; an answer to a cross-claim, if the answer contains a cross- 9 claim; a third-party complaint, if a person who was not an original party is summoned under 10 the provisions of Rule 14; and a third-party answer, if a third-party complaint is served." 11 GRCP 7(a). No other pleadings are allowed, save when the Court orders a reply to an answer 12 or a third-party answer. Id. 13 However, in addition to the authority provided by Rule 12(f), a court has inherent 14 authority to strike a motion in order to enforce its orders and ensure prompt disposition oflegal 15 actions. Fisher v. Whitlock, 784 Fed.App'x. 711, 712 (11th Cir. 2019). I6 2. Sur-reply 17 Sur-replies are heavily disfavored by courts. Warrior Energy Servs. Corp. v. ATP Titan 18 M/V, 551 F.App'x 749, 751 n.2 (5th Cir. 2014). When allowed, sur-replies are usually limited 19 to responding to new matters raised in a reply brief, or to presenting arguments or evidence that 20 could not have been included in an opposition brief. Austin v. Kroger Texas, L.P., 864 F.3d 21 326, 336 (5th Cir. 2017). "The decision to permit the filing of a surreply is purely discretionary 22 and should generally be allowed only for valid reasons, such as when the movant raises new 23 arguments in a reply brief." Meraz-Camacho v. U.S., 417 Fed.App'x. 558, 559 (7th Cir. 201 !). 24 If the moving party includes impennissible content in a reply brief, the Court can choose, in Page 8 of13 1 lieu of permitting a sur-reply, to simply disregard the impermissible content. Walsh v. Tele Tech 2 Systems, Inc., 821 F.3d 155, 159 n.2 (1st Cir. 2016);
3 b. The Motion to Strike is improper under GRCP 12(f), and the Court has no grounds to strike under its inherent authority.
4 Defendants do not specify through what authority they request the Court to strike 5 Plaintiffs reply to the Second Motion, but as stated above, the Court may typically only strike 6 a pleading in whole or in part by the authority of GRCP 12(f) or the Court's inherent authority.
7 The inherent powers of a trial court permit it "to go as far as to dismiss entire actions to rein in 8 abusive conduct." Ready Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402, 404 (9th Cir. 2010).
9 The Court may not strike Plaintiffs reply to the Second Motion under the authority of 10 GRCP 12(f), because motions to strike under 12(f) are reserved exclusively for pleadings and, 11 pursuant to GRCP 7(a), a reply to a motion for attorney's fees does not fall within that 12 category, nor does any exhibit attached to said reply.
13 As to the Court's inherent authority to strike, "[I]t necessarily follows that, as part of its 14 power to manage its own affairs ... a [trial] court can use less drastic measures such as striking 15 documents from the docket to address litigation conduct that does not warrant outright 16 dismissal." Id., at 404-405. However, "[b]ecause of their very potency, inherent powers must 17 be exercised with restraint and discretion. A primary aspect of that discretion is the ability to 18 fashion an appropriate sanction for conduct which abuses the judicial process." Thompson v.
19 Haus. Auth. ofLos Angeles, 782 F.2d 829,830 (9th Cir. 1986).
20 Upon review, the Court finds that Plaintiffs reply to the Second Motion does not merit 21 sanctions, and particularly does not merit striking the document in question from the record.
22 First, the invoices for attorney's fees attached to Plaintiffs reply are not some sudden, last-
23 minute piece of dispositive evidence that will change the entire outcome of these proceedings.
24
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I They were expected, both by the Court, which would inevitably require them in order to find 2 for attorney's fees under GRCP 54(d)(2), and by Defendants, who decried the lack of"copies 3 of counsel's itemized invoices" in their opposition to the Second Motion. Second, the reply 4 itself is not in question; Defendants are protesting an ancillary exhibit attached notwithstanding 5 Plaintiffs actual reply, an exhibit which, again, the Court would have requested in due time 6 without Defendants' intervention. 7 Defendants further argue that "there was no legitimate excuse for Plaintiffs failure to 8 timely submit the evidence necessary for the Court to consider its request for attorney fees," 9 and that other courts have granted motions to strike because new issues were raised in the reply IO brief that were not raised in the opening brief. The Court is unconvinced by this argument for 11 three reasons. First, the supporting documentation is not a new issue; it is an attachment that 12 corroborates a previously raised issue. Second, said documentation was not required to be filed 13 with the Second Motion. Third, in all of the cases cited by Defendants in furtherance of their 14 argument, the "reply briefs" in question refer to replies to the parties' opening briefs, i.e. 15 pleadings, which fall within the purview of GRCP 12(f) while the reply at issue in this case 16 does not. 17 The Court accordingly finds no grounds under GRCP 12(f) or its inherent authority to 18 strike in this instance, and therefore DENIES Defendants' Motion to Strike.
19 c. Defendants have not provided good cause to be granted leave to file a sur-
reply.
20 The Motion to Strike having been denied, Defendants have also asked in the alternative 21 for leave to file a sur-reply so that Defendants "may have an opportunity to respond to the new 22 evidence presented for the first time in Plaintiffs reply." Opp., at 3. The Court additionally 23 DENIES the motion for the below reasons.
24
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1 In requesting leave to file a sur-reply, Defendants cite to SP0012-16, Perez v. Civil 2 Serv. Comm 'n (Decision and Order, August 2, 2017), which the Court does not find to support 3 Defendants' position. In that case, the Honorable Vernon P. Perez granted leave to file a sur- 4 reply under a much narrower set of circumstances. "The Court, considering the facts that [the 5 movant] has raised a new issue in her Reply and the Surreply is limited to addressing only that 6 new issue in the Reply, will permit a Surreply." Perez, at 3 (August 2, 2017). The Court finds 7 that the current circumstances do not fit the scope of that decision because Plaintiff has raised 8 no new issue for Defendants to address, it has merely directly responded to Defendants' 9 argument that Plaintiff is not entitled to attorneys' fees. IO In contrast, Defendants' proposed sur-reply turns almost entirely upon the 11 reasonableness of the attorney's fees, an issue they did not raise in their opposition to the 12 Second Motion, allegedly because they were "unable to make any argument regarding the 13 reasonableness of Plaintiffs requested fees without [evidence of Plaintiffs entitlement to the 14 requested amount]." Mot. to Strike, at 2. Defendants argue that, according to Perez, sur-replies 15 may be allowed when the moving party "would be unable to contest matters presented to the 16 court for the first time in the opposing party's reply." Perez, p. 4 (Decision and Order, August 17 2, 2017). However, in their Motion to Strike et seq., Defendants do not explain or provide any 18 legal basis as to why Plaintiffs lack of supporting documentation rendered them unable to, 19 even nominally, contest the reasonableness of Plaintiffs attorney's fees in their opposition 20 brief. They do not name any statute or cite any case law that would have bound their hands. 21 They merely say that they could not raise the issue until they saw the supporting 22 documentation. The Court finds this disingenuous. Plaintiff clearly established the amount 23 sought in the Second Motion, and the Court does not find it too long a walk for a seasoned 24 Page 11 ofl3 1 lawyer to argue the reasonableness of that amount based on Plaintiffs previous Motion for 2 Attorney's Fees and the billing table in the Second Motion. Reply to Mot. to Strike, at 5. 3 The Court instead finds that, in failing to argue the issue of reasonableness in its 4 opposition, Defendants effectively abandoned that issue. "Typically, a non-movant's failure to 5 raise an issue in an opposition to a motion constitutes a waiver thereof." Brown v. DIRECTV, 6 LLC, 2019 WL 6604879 (C.D. Ca. 2019) (citing, inter alia, Shakur v. Schriro, 514 F.3d 878, 7 892 (9th Cir. 2008)). The proposed sur-reply being predicated upon an abandoned issue, and 8 there being no new argument put forth by Plaintiff in its reply, the Court exercises its discretion 9 and DENIES the request for leave to file the sur-reply. 10 d. Due Process Rights 11 Defendants additionally argue that, "[f]or the Court to consider the new evidence 12 submitted by Plaintiff without allowing Defendants to respond would deny Defendants' right 13 to due process." Mot. to Strike, at 2 (citing Dr. Robert L. Meinders, D. C., Ltd. V. 14 UnitedHealthcare, Inc., 800 F.3d 853, 858 (7th Cir. 2015). Defendants argue that the Meinders 15 court held that a trial court denied a party's due process rights by denying its motion to strike 16 reply and subsequently denying the party leave to file a sur-reply brief. The Court distinguishes 17 Meinders from this case, for several reasons. First, the trial court in that case did not base its 18 order solely on the new evidence submitted in the reply brief, it also "relied on a novel legal 19 theory" predicated upon that new evidence. Id. Second, the reply brief in that case was in 20 response to an opening brief, and was therefore, unlike the reply here, a pleading able to be 21 stricken by motion under 12(f). Third, the due process rights at issue in that case were raised 22 because it concerned a dispositive motion, i.e., a motion to dismiss. "Due process, we have 23 cautioned, requires that a plaintiff be given an opportunity to respond to an argument or 24 evidence raised as a basis to dismiss his or her claims." Id. "Accordingly, we hold that the Page 12 of 13 1 district court deprived Meinders due process by entering judgment against him on law and 2 facts to which he did not have a full and fair opportunity to respond." Id. The stakes are 3 nowhere near as high here. The Court has already entered its judgment in this case, and a 4 motion for attorney's fees and costs is far from dispositive. The Court therefore finds Meinders 5 to be of limited, if any, authority in this case, and that Defendants' due process rights have not 6 been violated in this instance. Accordingly, the Court maintains its decision to deny 7 Defendants' requests to strike and for leave to file a sur-reply. 8 CONCLUSION 9 For the reasons set forth above, the Court DENIES Defendants' Motion to Strike Reply 10 in Support of Second Motion for Attorney's Fees and Costs; DENIES Defendants' Motion for 11 Leave to File Sur-Reply; and GRANTS Plaintiffs Motion for Attorney's Fees and Costs. 12 13 IT IS so ORDERED _ _J_A_N_3 _0_20_24_. 14 15 16 17 18 19 20 21
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